Talent acquisition is important, but retaining your current talent is equally as important. While swooning new employees, companies need to make sure they don’t lose their current ones.Employee retention is an ongoing process. Trying to negotiate with an employee once they have given their notice is too little too late. Even if you offer a higher salary and better benefits, the choice has often already been made. Sure, some employees use interest from another company as leverage to get a promotion or a salary bump, but many are genuinely leaving once they say they will. How do you make sure your employees actively choose to stay with your company?
What Affects Employee Retention?
There are three main aspects which influence employee retention. The first aspect is the connections people have with other people or their links to those workplace activities which are not directly linked to their job. The second aspect deals with the ways in which the employees’ job links to other aspects of their lives. The third aspect is that of risk-management; what do employees have at stake if they leave or stay.
This means that in order for an employee to keep their job, they have to have strong connections with colleagues and preferably take part in some activities beyond their mandatory job tasks. In addition to this, their working life needs to be balanced with their home life and free time. Working life should fit a person’s life in general, not the other way around. Keeping your employees engaged in the workplace is a key factor in employee retention.
There are of course other factors which influence employee retention as well. According to a study on job embeddedness (the likelihood of staying in a job rather than quitting), employees are significantly more likely to look for another job, if their coworker is doing so as well, and the job embeddedness of coworkers is likely to have an effect on other employees’ decision to quit their jobs. This means if you want to keep your top talent, focus on keeping the general level of employee retention high. A culture where people are quick to leave makes employees more likely to look for a new job, even if their benefits and pay are in order.
How to Improve Employee Retention?
1. Be Flexible
Based on multiple surveys, one aspect which constantly comes up that significantly improves employee retention is job flexibility. Companies with flexible remote policies have 25 percent lower employee turnover compared to the companies that don't allow remote working. As remote employees are more efficient than those who never leave the solitude of their desk, this one is an all-around win-win.
2. Focus on Onboarding
It is important to focus on onboarding as well. Many employees quit within the first six months on the job, and a thorough onboarding process increases the likelihood that an employee will be integrated into the workplace and not look elsewhere after settling down.
Studies have shown onboarding isn't about performing miracles, and the things people ask for are very realistic: those who leave companies soon after starting report that more effective training and having a clearer vision of what was expected of them may have helped them stay.
3. Provide Learning Opportunities
Offering free coffee and a discount to the local donut shop surely adds to the happiness of your employees, but perks and benefits will not keep your employees where they are. One important feature of employee retention is the possibility for professional growth, and up to 87 percent of Millennial employees consider professional development in a job very important. Many employees move on to more interesting opportunities because it offers them the chance to learn new things. Having a better sounding title doesn’t hurt, either. Provide opportunities for professional development: make sure employees are given possibilities to train themselves and provide access to courses and seminars. Encourage employees’ initiatives to take on new responsibilities and actively offer new opportunities to learn on the job.
4. Recognize and Reward
Employees want to feel recognized for their effort and talent. Management and team leaders shouldn’t be chasing their tails in luring back employees who are about to quit, but rather remember to let all current employees know their efforts are noticed. If someone is doing an especially good job, let them and others know. But even the “mundane” tasks professionals handle every day take skills and expertise, and it is important to let employees know that the everyday work they do is important to the management. Support a corporate culture of positive feedback from both colleagues and management.
Read more: 5 Ways to Recognize Employees
5. Compensate Fairly
This one is pretty obvious, to be honest. If you want your employees to stay on the job, pay them well. Be aware of the current industry salary standard and make sure you are at least not underpaying your top talents. Many employees leave their jobs, because they have been offered a higher salary. Thus, in order to maintain a high level of employee retention, focus on salary is a must. An average company loses around a million dollars every time 10 managerial and professional employees leave the company. So while maintaining a low base salary might seem like a good way to keep the company financially successful, cutting corners in salaries can actually be incredibly expensive to companies.
6. Focus on Company Culture
One study found organizational culture has a stronger effect on employee retention than external factors or the employees’ own characteristics - combined. Organizational culture, it seems, is the key to employee retention. Make sure your employees feel they are heard and their suggestions are taken into consideration. Maintain and improve internal communications and make sure people feel they can be themselves and focus on professional development.
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